Tax Clarity for Mining and Staking Act
Sponsored By: Representative Carey, Mike [R-OH-15]
Introduced
Summary
Establishes a new tax framework for digital assets minted by mining and staking. This bill would create a new Subchapter W that generally treats newly minted digital assets as ordinary income measured at their fair market value on acquisition, while offering an election to defer recognition for qualified newly minted assets.
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- Validators (miners and stakers): The default rule would include the fair market value of newly minted assets in ordinary income when acquired. Validators could elect to defer income for qualified assets and must follow rules for allocating acquisition costs and treating future gains and losses.
- Investment trusts and funds: The bill clarifies that entities that stake for investors are not automatically stripped of trust status for having staking powers. It allows limited exceptions for active traders and authorizes the Treasury to issue implementing regulations.
- Businesses, partnerships, and cross-border taxpayers: New sourcing and partnership rules change how income and gains from newly minted assets are allocated, and they make those items count for the qualified business income deduction and related basis carryover rules.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 0 benefits, 0 costs, 4 mixed.
Trust tax rules for staking funds
If enacted, an investment trust would not lose its tax trust status just because the trustee stakes assets or handles staking rewards. This protection would not apply if the entity actively runs a validation business. The Treasury could set rules on how brokers and trusts report newly minted assets and may require owners to tell brokers if they made the special election. The rules may allow aggregation or approximation methods to reduce reporting burdens.
New tax rules for mining and staking
If enacted, the bill would add a new tax subchapter for newly minted digital assets received from validating transactions. It would set default inclusion rules and an optional election, and it would add definitions for terms like "digital asset," "staking," "mining," and "newly minted." The Treasury Secretary would be allowed to issue rules and reasonable methods to decide newly minted status and to implement allocation and accounting rules.
Optional deferral for validators' rewards
If enacted, you could elect to defer including qualified newly minted digital assets in income for the taxable year. If you make this election, related acquisition costs would be capitalized and allocated to those qualified assets. Selling qualified assets while the election applies would treat gains as ordinary income and losses as ordinary to the allowed extent. The election must be made at the partnership or S-corporation level when applicable and would not be available to some foreign entities such as controlled foreign corporations or passive foreign investment companies.
Tax on newly minted crypto rewards
If enacted, the fair market value of any newly minted digital asset you get would count as ordinary income when you take possession. That value would also become your tax basis in the asset. Costs tied to validating transactions could be treated as current expenses instead of capital costs unless the Treasury allows capitalization. Coming to possess an asset by any means would count as acquisition, and trust distributions or transfers from a decedent would count as dispositions.
Sponsors & CoSponsors
Sponsor
Carey, Mike [R-OH-15]
OH • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov